Canada's planned 2023 auction of 250 MHz of C-band spectrum for 5G might mean incumbent user Telesat will be approached by auction bidders about clearing out sooner than the 2025 deadline, though that could be "a messy process" about spectrum not yet won and possibly revealing confidential bidding strategies, Lightshed Partners analyst Walt Piecyk wrote investors Tuesday. He said Telesat will be left with 200 MHz, but it likely needs only half that, which could be an opportunity to monetize the other 100 MHz later. He said the Innovation Science and Economic Development (ISED) Canada announcement last week about the country's C-band approach seems to "set Canada’s 5G ecosystem back relative to other countries." Telesat was willing to clear the spectrum by end of 2023, so ISED setting a 2025 deadline is "a loss for the wireless operators and suppliers in Canada," he said. Canada delaying accessing the C band will drive up prices, which benefits the Canadian government, he said. Telesat said it's evaluating ISED's 3.8 GHz decision. It said ISED didn't adopt Telesat's proposal for clearing a portion of the band and auctioning that spectrum, with proceeds going to help fund Telesat's planned low earth orbit Lightspeed constellation, but it was "pleased that the decision acknowledged the important role LEO constellations can play in bridging the Digital Divide and, to this end, that the Government is in discussions with Telesat to support funding of the Lightspeed program.”
Wireless Spectrum Auctions
The FCC manages and licenses the electromagnetic spectrum used by wireless, broadcast, satellite and other telecommunications services for government and commercial users. This activity includes organizing specific telecommunications modes to only use specific frequencies and maintaining the licensing systems for each frequency such that communications services and devices using different bands receive as little interference as possible.
What are spectrum auctions?
The FCC will periodically hold auctions of unused or newly available spectrum frequencies, in which potential licensees can bid to acquire the rights to use a specific frequency for a specific purpose. As an example, over the last few years the U.S. government has conducted periodic auctions of different GHz bands to support the growth of 5G services.
Staying 4.9 GHz band rules as proposed by acting Chairwoman Jessica Rosenworcel isn't a slam dunk. Rosenworcel appears close to lining up a third vote to support the stay, FCC and public safety officials said in interviews last week. The order made broad changes, giving control to states. Few of them have engaged. A Louisiana bill to reallocate the band per the FCC order got unanimous House approval last month and could pass the Senate Monday.
Aviation interests urged the FCC to take mitigation steps to protect low range radar altimeter operations. They countered arguments by CTIA and major wireless carriers that rules protect those operations. The groups previously raised concerns and asked that the record-setting auction be delayed (see 2012080040). Without mitigation, “the FCC will expose aviation and the traveling public to significant safety risk from interference to radar altimeters,” said a filing posted Thursday in docket 18-122. The letter was signed by the Aerospace Industries Association, Air Line Pilots Association International, Airbus, Aviation Spectrum Resources, Collins Aerospace, Garmin, Honeywell, the International Air Transport Association, the National Air Carrier Association and others.
Dish Chairman Charlie Ergen let loose Thursday at T-Mobile and CEO Mike Sievert for their defense of plans to shut down the legacy CDMA wireless network by year-end (see Ref:2104140036]). T-Mobile’s potential to disenfranchise millions of customers makes the carrier comparable with the Grinch who stole Christmas, said Ergen on a Q1 call.
Noting the high use of texting by populations particularly at risk to suicide, such as kids and minorities, the four FCC members on Thursday approved a Further NPRM on a mandate that carriers provide capabilities to text the 988 National Suicide Prevention Lifeline (see 2103310030). Also getting unanimous approvals at the commissioners' meeting were an order allocating spectrum for commercial space launches and an NPRM on setting a framework for informing 911 centers of network outages affecting them, as well as an NPRM on wireless mics in the TV and other bands and an order ending the 800 MHz rebranding process (see 2104220056). Commissioners also OK'd a $4.1 million slamming fine.
AT&T had a wireless growth surprise in Q1, with 595,000 postpaid phone net adds and postpaid churn of 0.76%, better than analyst expectations. Verizon reported Wednesday it lost postpaid subscribers (see 2104210060). AT&T CEO John Stankey warned on a Thursday call with analysts that supply chain issues could complicate C-band deployments.
House Communications Subcommittee members of both parties largely agreed during a Wednesday hearing that to secure U.S. leadership on 5G technology, Congress must fully fund work on speeding adoption of open radio access networks, and that agencies should return to a unified spectrum policy approach during President Joe Biden’s administration. Tech policy bipartisanship was also evident as Senate Majority Leader Chuck Schumer, D-N.Y., Rep. Ro Khanna, D-Calif., and others of both parties introduced, as promised, a revised version of the Endless Frontier Act. It appears to be back on track (see 2104140069) for swift action after earlier GOP misgivings.
With T-Mobile coming on strong and competition intensifying, Verizon lost 178,000 postpaid wireless phone subscribers in Q1. Verizon was the first of the big three to report, with AT&T set for Thursday. Verizon’s buy of Tracfone will likely close in Q3, CEO Hans Vestberg told analysts Wednesday: “Everything we said from the beginning is holding true. The process is continuing as expected.” The FCC asked both companies last week for more data, including the deal's implications for Lifeline customers (see 2104140064). Vestberg defended the company’s $52.9 billion in bids in the C-band auction. “The combination of C band and our millimeter wave places us in a unique position of strength to execute on all 5G opportunities,” he said. Verizon ordered half the gear it needs to deploy in the C band this year, he said. Verizon is feeling effects from the pandemic, Vestberg said. “While we see significant progress in vaccinations, customer sentiment and recovery of our economy, there is still a lot to go before we are back to normal.” Asked if Verizon planned to apply for emergency broadband funds from the FCC, Vestberg said companies should take the lead, with government focusing on “affordability.” Profit was $5.4 billion, up from $4.3 billion a year ago and better than any quarter last year. Revenue was $32.9 billion, up from $31.6 billion. Verizon added a net 98,000 Fios customers but lost 82,000 pay-TV subscribers, citing "the ongoing shift from traditional linear video to over-the-top offerings." Verizon’s advantages in the 4G era are slipping away, MoffettNathanson’s Craig Moffett told investors. “In 5G, Verizon looks destined to be a fast-follower, at best,” he said. “Verizon is quick to argue that T-Mobile’s 2.5 GHz spectrum won’t translate into a coverage advantage (they argue that their newly-won 3.7 GHz spectrum will propagate just as far given allowable power level differences). Good try. But T-Mobile has more spectrum, they have it sooner, and they’re already far down the road of building out their network.” New Street’s Jonathan Chaplin said he’s watching long-term trends for Verizon more than quarterly results. “We were surprised by long-term guidance of flat margins amid improving revenue growth; wireless has always been a business with operating leverage,” he told investors: “We suspect the investment in infrastructure to deploy C-Band is driving up fixed costs.”
CTIA and major wireless carriers urged the FCC to provide more information as soon as possible on how the 3.45 GHz band will be cleared and the protections that will continue for federal incumbents, in initial comments on the auction procedures public notice. Carriers generally were enthusiastic about the FCC’s next 5G auction, starting in October, but sought some tweaks. Comments were posted Thursday in docket 21-62. The Competitive Carriers Association asked for higher bidding credits.
Senators in both parties continued to emphasize the importance of communications sector interests in an eventual infrastructure spending package Thursday, as talks continued on the scope of such legislation. Senate Commerce Committee Chair Maria Cantwell, D-Wash., said during a Communications Subcommittee hearing that she’s going to push for local media outlets to receive some funding in a final infrastructure bill. Committee ranking member Roger Wicker of Mississippi and other Republicans said they’re committed to including broadband language in a planned counterproposal to President Joe Biden’s $2.3 trillion infrastructure package (see 2104140069).